Saturday, January 22, 2011

Last week Comcast got final approval to purchase a controlling share of NBC Universal. They're giving up their management stake in Hulu, agreeing to a lot of stipulations including seven years of governmental monitoring, to acquire the 51% share of the company. They've been working on the deal since back in 2009 and Comcast has jumped through a lot of hoops to get FCC and Justice Department approval. I've posted copies of both agreements at the end of this article.

Courtesy of requirements imposed by the FCC I'm going to be subsidizing cable service and computers, netbooks and other computer equipment to 2.5 million low income homes and free cable to over 600 institutions in low-income areas.

Broadband Adoption and Deployment. Comcast will make available to approximately 2.5 million low income households: (i) high-speed Internet access service for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital-literacy education opportunities. Comcast will also expand its existing broadband networks to reach approximately 400,000 additional homes, provide broadband Internet access service in six additional rural communities, and provide free video and high-speed Internet service to 600 new anchor institutions, such as schools and libraries, in underserved, low-income areas.

My Comcast cable bill went up $2 this month and my Comcast Internet also went up $2. Yep, I know $4 is not much in the scheme of things, but we haven't had a cost of living increase in three years. Advertising on my websites tanked in comparison to the good old days and sales at shows are down. The cost of gas and groceries has substantially increased ruing that same time period. We haven't stopped our donations to charities, in fact, we've scrimped a bit more so we could increase our giving.

First thing we did was call and cancel HBO. That'll save us $16 a month. We should have done that a long time ago but watched it enough to justify having it since we've pretty much given up going to the movie-theater.

I don't know if the increase was a preemptive increase to try and cover the costs of the purchase of shares or all the requirements the FCC saddled them with. They had to know the deal was pretty much a given long before the 18th when the won approval. It would be smart on their part to do the increase prior to the actual purchase just to give them a bit of plausible deniability.

I don't blame Comcast, although I suppose they did agree to the terms so they are culpable to some degree. I definitely blame the government. What right does the government have to require a company to give? What in the world does that have to do with managing NBC?

I was at a show last weekend and a Dish Network company was next to our booth. I noticed a sign they'd posted that said if I lived in certain areas I could get $39 a month service with no equipment costs, no down payment and no credit check. It was part of the stimulus package according to the guys in the tent. They're trying to get everyone hooked up... a prospect that kind of scares me in a big brother kind of way. I suddenly feel the need to cover the camera eye on my laptop...

The government is sticking its nose into every crevice of our society. They tout all these laudable reasons... increasing jobs, making us more competitive, etc. I don't believe the purpose of our government is to get into social engineering, into the cable business, into the business of forcing companies to do good.

The government has taken the role of an evil Robin Hood. They force those of us who've busted our butts to stay afloat to pay for those who often don't try. I know there are many in our society who do not have the ability to take care of themselves. I know that there are those who hit hard times and with a bit of a boost could climb out of the hole their in. I believe it is my responsibility, not that of the government, to give and help. I don't appreciate having the government choose who I donate my hard earned dollars to.

I also believe that it's time our churches quit building multi-million dollar houses of worship. They need to put their money into helping the needy, the truly needy. I know many churches have outstanding programs to help their community. I'm not knocking what they're doing, just saying that if the churches really got into action they could eliminate a whole lot of sorrow outside the doors of their opulent buildings.

Going back to my original train of thought on Comcast and the government's roll in forcing them to give, thus forcing me to give... many of the companies I pay each month have philanthropic arms. They donate regularly to charities and causes. I rather like the way our local EMC handles their giving - they give me the option of donating something each month to their charitable fund. I don't have to do it and I have no say over who gets it, but at least I can say no.

I want less government. Every time they touch something it costs me. I end up paying higher taxes, higher utility bills, higher prices at the gas pump, higher grocery bills. A lot of that is directly caused by their interference.

The Comcast / NBC Universal deal will be finalized on Jan. 28th. Wonder if they'll be going up on my bill again?
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FCC GRANTS APPROVAL OF COMCAST-NBCU TRANSACTION

Washington, D.C.-- Today, the Federal Communications Commission grants—with conditions and enforceable commitments—approval of theassignment and transfer of control of broadcast, satellite, and other radio licenses from General Electric Company (GE) to Comcast Corporation. The approval will allow GE and Comcast to create a joint venture involving NBC Universal, Inc. (NBCU) and Comcast. An Order further explaining the Commission’s reasoning and the conditions and commitments will be issued shortly.

The Commission's decision is based on a thorough review of the record, which includes extensive data and voluntary commitments from the applicants, as well as thousands of comments from interested parties and public input received at a public forum held in Chicago. Based on this review, the Commission has determined that granting the application, with certain conditions and contingent upon enforceable commitments, is in the public interest.

As part of the merger, Comcast-NBCU will be required to take affirmative steps to foster competition in the video marketplace. In addition, Comcast-NBCU will increase local news coverage to viewers; expand children's programming; enhance the diversity of programming available to Spanish-speaking viewers; offer broadband services to low-income Americans at reduced monthly prices; and provide high-speed broadband to schools, libraries and underserved communities, among other public benefits.

More specifically, theconditions imposed by the Commission address potential harms posed by the combination of Comcast, the nation’s largest cable operator and Internet service provider, and NBCU, which owns and develops some of the most valuable television and film content. These targeted conditions and commitments, which generally will remain in effect for seven years, include:

·Ensuring Reasonable Access to Comcast-NBCU Programming for Multichannel Distribution. Building on successful requirements adopted in prior, similar transactions, the Commission is establishing for rival multichannel video programming distributors (MVPDs) an improved commercial arbitration process for resolving disputes about prices, terms, and conditions for licensing Comcast-NBCU’s video programming. The Commission is also requiring Comcast-NBCU to make available through this process its cable channels in addition to broadcast and regional sports network programming.

·Protecting the Development of Online Competition. Recognizing the risks this transaction could present to the development of innovative online video distribution services, the Commission has adopted conditions designed to guaranteebona fideonline distributors the ability to obtain Comcast-NBCU programming in appropriate circumstances. These conditions respond directly to the concerns voiced by participants in the proceeding—including consumer advocates, online video distributors (OVDs), and MVPDs —while respecting the legitimate business interests of the Applicants to protect the value of their content. Among other things, the Commission requires that Comcast and/or Comcast-NBCU:

oProvides to all MVPDs, at fair market value and non-discriminatory prices, terms, and conditions, any affiliated content that Comcast makes available online to its own subscribers or to other MVPD subscribers.

oOffers its video programming to legitimate OVDs on the same terms and conditions that would be available to an MVPD.

oMakes comparable programming available on economically comparable prices, terms, and conditions to an OVD that has entered into an arrangement to distribute programming from one or more of Comcast-NBCU’s peers.

oOffers standalone broadband Internet access services at reasonable prices and of sufficient bandwidth so that customers can access online video services without the need to purchase a cable television subscription from Comcast.

oDoes not enter into agreements to unreasonably restrict online distribution of its own video programming or programming of other providers.

oDoes not exercise corporate control over or unreasonably withhold programming from Hulu.

·Access to Comcast’s Distribution Systems. In light of the significant additional video programming Comcast will control after the merger with NBCU—programming that may compete with third-party programming Comcast currently carries or otherwise would carry on its MVPD service—the Commission requires that Comcast not discriminate in video programming distribution on the basis of affiliation or non-affiliation with Comcast-NBCU. Moreover, if Comcast “neighborhoods” its news (including business news) channels, it must include all unaffiliated news (or business news) channels in that neighborhood. The Commission also adopts as a condition of the transaction Comcast’s voluntary commitment to provide 10 new independent channels within eight years on its digital tier.

·Protecting Diversity, Localism, Broadcast and Other Public Interest Concerns. The Commission is also imposing conditions and accepting voluntary commitments concerning a numbers of other public interest issues, including diversity, localism, and broadcasting, among others. For example, to protect the integrity of over-the-air broadcasting, network-affiliate relations, and fair and equitable retransmission consent negotiations with the joint venture, the Commission adopts a series of conditions that were independently negotiated between the Applicants and various network affiliates.

TheApplicants have also made a number of additional voluntary commitments, many of which the Commission has adopted as conditions to the transaction’s approval. Most of these commitments are geared towards enhancing the public interest as a result of the joint venture. These commitments include:

·Broadband Adoption and Deployment. Comcast will make available to approximately 2.5 million low income households: (i) high-speed Internet access service for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital-literacy education opportunities. Comcast will also expand its existing broadband networks to reach approximately 400,000 additional homes, provide broadband Internet access service in six additional rural communities, and provide free video and high-speed Internet service to 600 new anchor institutions, such as schools and libraries, in underserved, low-income areas.

·Localism. To further broadcast localism, Comcast-NBCU will maintain at least the current level of news and information programming on NBC’s and Telemundo’s owned-and-operated (“O&O”) broadcast stations, and in some cases expand news and other local content. NBC and Telemundo O&O stations also will provide thousands of additional hours of local news and information programming to their viewers, and some of its NBC stations will enter into cooperative arrangements with locally focused nonprofit news organizations. Additional free, on-demand local programming will be made available as well.

·Children’s Programming. Comcast-NBCU will increase the availability of children’s programming on its NBC and Telemundo broadcast stations, and add at least 1,500 more choices to Comcast’s on-demand offerings for children. It will provide additional on-screen ratings information for original entertainment programming on the Comcast-NBCU broadcast and cable television channels and improved parental controls. Comcast-NBCU also will restrict interactive advertising aimed at children 12 years old and younger and provide public service announcements addressing children’s issues.

·Programming Diversity. Building on Comcast’s voluntary commitments in this area, we require Comcast-NBCU to increase programming diversity by expanding its over-the-air programming to the Spanish language-speaking community, and by making NBCU’s Spanish-language broadcast programming available via Comcast’s on demand and online platforms. As noted above, Comcast also will add at least 10 new independent channels to its cable offerings.

·Public, Educational, and Governmental (“PEG”) Programming. Comcast will safeguard the continued accessibility and signal quality of PEG channels on its cable television systems and introduce new on demand and online platforms for PEG content.

Action by the Commission January 18, 2011 by: Memorandum Opinion and Order (FCC 11-4). Chairman Genachowski and Commissioner Clyburn, with Commissioners McDowell and Baker concurring, and Commissioner Copps dissenting. Chairman Genachowski and Commissioners Clyburn and Copps each issuing a separate statement, with Commissioners McDowell and Baker issuing a joint statement.

Companies Agree to License Programming to Online Distributors and Comply with Anti-Retaliation Provisions and Open Internet Requirements

WASHINGTON — The Department of Justice announced today a settlement with Comcast Corp. and General Electric Co.'s subsidiary NBC Universal Inc. (NBCU) that allows their joint venture to proceed conditioned on the parties' agreement to license programming to online competitors to Comcast's cable TV services, subject themselves to anti-retaliation provisions and adhere to Open Internet requirements. The department said that the proposed settlement will preserve new content distribution models that offer more products and greater innovation, and the potential to provide consumers access to their favorite programming on a variety of devices in a wide selection of packages. The Department of Justice's Antitrust Division, along with five state attorneys general, filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia, to block the formation of the joint venture, alleging that the transaction would allow Comcast to limit competition from its cable, satellite, telephone and online competitors. At the same time, the department and the states filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit. The participating states are: California, Florida, Missouri, Texas and Washington. "The Antitrust Division worked in close cooperation and unprecedented coordination with the Federal Communications Commission (FCC) to reach a result that fully protects competition, allowing businesses to bring new and innovative products to the marketplace, providing consumers with more programming choices," said Christine Varney, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. "The conditions imposed will maintain an open and fair marketplace while at the same time allow the innovative aspects of the transaction to go forward." Today, the FCC also issued an order approving the proposed transaction subject to conditions, some of which are similar to those in the department's settlement. The department and FCC consulted extensively to coordinate their reviews and create remedies that were both consistent and comprehensive. Consistent with the department's complaint, the FCC order requires the joint venture to license NBCU content to Comcast's cable, satellite and telephone competitors, making it unnecessary for the department to impose the same requirement. The department's complaint alleges that Comcast's traditional and online rivals need access to NBCU programming, including the NBC broadcast network, to compete effectively against Comcast. The joint venture would have less incentive to distribute NBCU programming to Comcast's video distribution rivals than a stand-alone NBCU, and could cause Comcast's rivals and their customers to face higher prices for that content. The department said that the joint venture, as originally proposed, may have substantially lessened competition for video programming distribution in major portions of the United States. The department also said that the market would experience lower levels of investment, less experimentation with new models of delivering content and less diversity in the types and range of product offerings. Under the proposed settlement and the FCC order, the joint venture must make available to online video distributors (OVDs) the same package of broadcast and cable channels that it sells to traditional video programming distributors. In addition, the joint venture must offer an OVD broadcast, cable and film content that is similar to, or better than, the content the distributor receives from any of the joint venture's programming peers. These peers are NBC's broadcast competitors (ABC, CBS and FOX), the largest cable programmers (News Corp., Time Warner Inc., Viacom Inc. and The Walt Disney Co.), and the largest video production studios (News Corp., Sony Corporation of America, Time Warner Inc., Viacom Inc. and The Walt Disney Co.). In the event of a licensing dispute between the joint venture and an online video distributor, the department may seek court enforcement of the settlement or permit, in its sole discretion, the aggrieved online video distributor to pursue a commercial arbitration procedure established under the settlement. The FCC order also requires the joint venture to license content to OVDs on reasonable terms and includes an arbitration mechanism for resolving disputes. If timely arbitration is available for resolution of disputes under the FCC order, the department ordinarily will defer to the FCC's arbitration process to resolve such disputes. The FCC order also allows Comcast's traditional competitors, such as satellite and telephone companies, to invoke arbitration at the FCC to resolve program access and retransmission consent disputes. The settlement also includes other relief aimed at ensuring that Comcast cannot evade the provisions designed to protect competition. For example:

Comcast may not retaliate against any broadcast network (or affiliate), cable programmer, production studio or content licensee for licensing content to a competing cable, satellite or telephone company or OVD, or for raising concerns to the department or the FCC;

Comcast must relinquish its management rights in Hulu, an OVD. Without such a remedy, Comcast could, through its seats on Hulu's board of directors, interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast's video service. Comcast also must continue to make NBCU content available to Hulu that is comparable to the programming Hulu obtains from Disney and News Corp;

In accordance with recently established Open Internet requirements, Comcast is prohibited from unreasonably discriminating in the transmission of an OVD's lawful network traffic to a Comcast broadband customer. Comcast must also maintain the high-speed Internet service it offers to its customers by continuing to offer download speeds of at least 12 megabits per second in markets where it has upgraded its broadband network. Additionally, Comcast is required to give other firms' content equal treatment under any of its broadband offerings that involve caps, tiers, metering for consumption or other usage-based pricing; and

Comcast may not, with certain narrow exceptions, require programmers or video distributors to agree to licensing terms that seek to limit online distributors' access to content.

Comcast is a Pennsylvania corporation headquartered in Philadelphia. It is the largest video programming distributor in the nation, with approximately 23 million video subscribers. Comcast wholly owns national cable programming networks (e.g., E! Entertainment, Golf, Style), has partial interests in other networks (e.g., MLB Network, PBS KIDS Sprout), and has controlling interests in regional sports networks. Comcast also owns digital properties such as DailyCandy.com, Fandango.com and Fancast, its online video website. In 2009, Comcast reported total revenues of $32 billion. GE is a New York corporation with its principal place of business in Fairfield, Conn. GE is a global infrastructure, finance and media company. GE owns 88 percent of NBCU, a Delaware corporation, with its headquarters in New York City. NBCU is principally involved in the production, packaging and marketing of news, sports and entertainment programming. NBCU wholly owns the NBC and Telemundo broadcast networks, as well as 10 local NBC owned and operated television stations (O&Os), 16 Telemundo O&Os and one independent Spanish language television station. In addition, NBCU wholly owns national cable programming networks – Bravo, Chiller, CNBC, CNBC World, MSNBC, mun2, Oxygen, Sleuth, SyFy and USA Network – and partially owns A&E Television Networks (including the Biography, History and Lifetime cable networks), The Weather Channel and ShopNBC. NBCU also owns Universal Pictures, Focus Films and Universal Studios. In 2009, NBCU had total revenues of $15.4 billion. As required by the Tunney Act, the proposed seven-year settlement, along with the department's competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Nancy Goodman, Chief, Telecommunications & Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.

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